42 U.S. Code § 1396u–5 - Special provisions relating to medicare prescription drug benefit
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(a) Requirements relating to medicare prescription drug low-income subsidies, medicare transitional prescription drug assistance, and medicare cost-sharing
As a condition of its State plan under this subchapter under section 1396a (a)(66) of this title and receipt of any Federal financial assistance under section 1396b (a) of this title subject to subsection (e) of this section, a State shall do the following:
(1) Information for transitional prescription drug assistance verification
(2) Eligibility determinations for low-income subsidies
The State shall—
(A) make determinations of eligibility for premium and cost-sharing subsidies under and in accordance with section 1395w–114 of this title;
(B) inform the Secretary of such determinations in cases in which such eligibility is established; and
(C) otherwise provide the Secretary with such information as may be required to carry out part D, other than subpart 4, of subchapter XVIII of this chapter (including section 1395w–114 of this title).
(3) Screening for eligibility, and enrollment of, beneficiaries for medicare cost-sharing
As part of making an eligibility determination required under paragraph (2) for an individual, the State shall make a determination of the individual’s eligibility for medical assistance for any medicare cost-sharing described in section 1396d (p)(3) of this title and, if the individual is eligible for any such medicare cost-sharing, offer enrollment to the individual under the State plan (or under a waiver of such plan).
(4) Consideration of data transmitted by the Social Security Administration for purposes of Medicare Savings Program
The State shall accept data transmitted under section 1320b–14 (c)(3) of this title and act on such data in the same manner and in accordance with the same deadlines as if the data constituted an initiation of an application for benefits under the Medicare Savings Program (as defined for purposes of such section) that had been submitted directly by the applicant. The date of the individual’s application for the low income subsidy program from which the data have been derived shall constitute the date of filing of such application for benefits under the Medicare Savings Program.
(b) Regular Federal subsidy of administrative costs
(c) Federal assumption of medicaid prescription drug costs for dually eligible individuals
(1) Phased-down State contribution
(A) In general
Each of the 50 States and the District of Columbia for each month beginning with January 2006 shall provide for payment under this subsection to the Secretary of the product of—
(ii) the total number of full-benefit dual eligible individuals (as defined in paragraph (6)) for such State and month; and
(B) Form and manner of payment
Payment under subparagraph (A) shall be made in a manner specified by the Secretary that is similar to the manner in which State payments are made under an agreement entered into under section 1395v of this title, except that all such payments shall be deposited into the Medicare Prescription Drug Account in the Federal Supplementary Medical Insurance Trust Fund.
If a State fails to pay to the Secretary an amount required under subparagraph (A), interest shall accrue on such amount at the rate provided under section 1396b (d)(5) of this title. The amount so owed and applicable interest shall be immediately offset against amounts otherwise payable to the State under section 1396b (a) of this title subject to subsection (e) of this section, in accordance with the Federal Claims Collection Act of 1996  and applicable regulations.
(A) In general
The amount computed under this paragraph for a State described in paragraph (1) and for a month in a year is equal to—
(i) 1/12 of the product of—
(I) the base year State medicaid per capita expenditures for covered part D drugs for full-benefit dual eligible individuals (as computed under paragraph (3)); and
(3) Base year state medicaid per capita expenditures for covered part D drugs for full-benefit dual eligible individuals
(A) In general
For purposes of paragraph (2)(A), the “base year State medicaid per capita expenditures for covered part D drugs for full-benefit dual eligible individuals” for a State is equal to the weighted average (as weighted under subparagraph (C)) of—
(i) the gross per capita medicaid expenditures for prescription drugs for 2003, determined under subparagraph (B); and
(B) Gross per capita medicaid expenditures for prescription drugs
(i) In general The gross per capita medicaid expenditures for prescription drugs for 2003 under this subparagraph is equal to the expenditures, including dispensing fees, for the State under this subchapter during 2003 for covered outpatient drugs, determined per full-benefit-dual-eligible-individual for such individuals not receiving medical assistance for such drugs through a medicaid managed care plan.
(ii) Determination In determining the amount under clause (i), the Secretary shall—
(II) exclude expenditures attributable to covered outpatient prescription drugs that are not covered part D drugs (as defined in section 1395w–102 (e) of this title, including drugs described in subparagraph (K) of section 1396r–8 (d)(2) of this title); and
(iii) Adjustment factor The adjustment factor described in this clause for a State is equal to the ratio for the State for 2003 of—
(I) aggregate payments under agreements under section 1396r–8 of this title; to
(II) the gross expenditures under this subchapter for covered outpatient drugs referred to in clause (i).
Such factor shall be determined based on information reported by the State in the medicaid financial management reports (form CMS–64) for the 4 quarters of calendar year 2003 and such other data as the Secretary may require.
(C) Weighted average
The weighted average under subparagraph (A) shall be determined taking into account—
(i) with respect to subparagraph (A)(i), the average number of full-benefit dual eligible individuals in 2003 who are not described in clause (ii); and
(4) Applicable growth factor
The applicable growth factor under this paragraph for—
(A) each of 2004, 2005, and 2006, is the average annual percent change (to that year from the previous year) of the per capita amount of prescription drug expenditures (as determined based on the most recent National Health Expenditure projections for the years involved); and
The factor under this paragraph for a month—
(6) Full-benefit dual eligible individual defined
(A) In general
For purposes of this section, the term “full-benefit dual eligible individual” means for a State for a month an individual who—
(i) has coverage for the month for covered part D drugs under a prescription drug plan under part D of subchapter XVIII of this chapter, or under an MA–PD plan under part C of such subchapter; and
(ii) is determined eligible by the State for medical assistance for full benefits under this subchapter for such month under section 1396a (a)(10)(A) or 1396a (a)(10)(C) of this title, by reason of section 1396a (f) of this title, or under any other category of eligibility for medical assistance for full benefits under this subchapter, as determined by the Secretary.
(B) Treatment of medically needy and other individuals required to spend down
In applying subparagraph (A) in the case of an individual determined to be eligible by the State for medical assistance under section 1396a (a)(10)(C) of this title or by reason of section 1396a (f) of this title, the individual shall be treated as meeting the requirement of subparagraph (A)(ii) for any month if such medical assistance is provided for in any part of the month.
(d) Coordination of prescription drug benefits
(1) Medicare as primary payor
In the case of a part D eligible individual (as defined in section 1395w–101 (a)(3)(A) of this title) who is described in subsection (c)(6)(A)(ii) of this section, notwithstanding any other provision of this subchapter, medical assistance is not available under this subchapter for such drugs (or for any cost-sharing respecting such drugs), and the rules under this subchapter relating to the provision of medical assistance for such drugs shall not apply. The provision of benefits with respect to such drugs shall not be considered as the provision of care or services under the plan under this subchapter. No payment may be made under section 1396b (a) of this title for prescribed drugs for which medical assistance is not available pursuant to this paragraph.
(2) Coverage of certain excludable drugs
In the case of medical assistance under this subchapter with respect to a covered outpatient drug (other than a covered part D drug) furnished to an individual who is enrolled in a prescription drug plan under part D of subchapter XVIII of this chapter or an MA–PD plan under part C of such subchapter, the State may elect to provide such medical assistance in the manner otherwise provided in the case of individuals who are not full-benefit dual eligible individuals or through an arrangement with such plan.
(e) Treatment of territories
(1) In general
In the case of a State, other than the 50 States and the District of Columbia—
(B) if the State establishes and submits to the Secretary a plan described in paragraph (2) (for providing medical assistance with respect to the provision of prescription drugs to part D eligible individuals), the amount otherwise determined under section 1308 (f) of this title (as increased under section 1308 (g) of this title) for the State shall be increased by the amount for the fiscal period specified in paragraph (3).
The Secretary shall determine that a plan is described in this paragraph if the plan—
(A) provides medical assistance with respect to the provision of covered part D drugs (as defined in section 1395w–102 (e) of this title) to low-income part D eligible individuals;
(B) provides assurances that additional amounts received by the State that are attributable to the operation of this subsection shall be used only for such assistance and related administrative expenses and that no more than 10 percent of the amount specified in paragraph (3)(A) for the State for any fiscal period shall be used for such administrative expenses; and
(3) Increased amount
(A) In general
The amount specified in this paragraph for a State for a year is equal to the product of—
(ii) the ratio (as estimated by the Secretary) of—
(I) the number of individuals who are entitled to benefits under part A  or enrolled under part B  and who reside in the State (as determined by the Secretary based on the most recent available data before the beginning of the year); to
(B) Aggregate amount
The aggregate amount specified in this subparagraph for—
 See References in Text note below.
Source(Aug. 14, 1935, ch. 531, title XIX, § 1935, as added and amended Pub. L. 108–173, title I, § 103(a)(2)(B), (b)–(d)(1), Dec. 8, 2003, 117 Stat. 2154–2158; Pub. L. 109–91, title I, § 104(c),Oct. 20, 2005, 119 Stat. 2093; Pub. L. 110–275, title I, § 113(b),July 15, 2008, 122 Stat. 2506.)
References in Text
No act with the title Federal Claims Collection Act of 1996, referred to in subsec. (c)(1)(C), has been enacted. However, Pub. L. 89–508, July 19, 1966, 80 Stat. 308, was known as the Federal Claims Collection Act of 1966. Sections 2, 3, and 5 ofPub. L. 89–508, which enacted sections 951, 952, and 954, respectively, of former Title 31, Money and Finance, were repealed by Pub. L. 97–258, § 5(b),Sept. 13, 1982, 96 Stat. 877, the first section of which enacted Title 31, Money and Finance. For disposition of sections of former Title 31 into revised Title 31, see Table preceding section 101 of Title 31. For complete classification of Pub. L. 89–508to the Code, see Tables.
Parts A and B, referred to in subsec. (e)(3)(A)(ii)(I), probably means parts A and B of subchapter XVIII of this chapter. This subchapter does not contain parts.
A prior section 1935 of act Aug. 14, 1935, was renumbered section 1939 and is classified to section 1396v of this title.
2008—Subsec. (a). Pub. L. 110–275amended heading to include reference to medicare cost-sharing and added par. (4).
2005—Subsec. (c)(3)(B)(ii)(II). Pub. L. 109–91inserted “, including drugs described in subparagraph (K) of section 1396r–8 (d)(2) of this title” after “section 1395w–102 (e) of this title”.
2003—Subsec. (a). Pub. L. 108–173, § 103(d)(1)(A), inserted “subject to subsection (e) of this section” after “section 1396b (a) of this title” in introductory provisions.
Subsec. (c). Pub. L. 108–173, § 103(b), added subsec. (c).
Subsec. (c)(1)(C). Pub. L. 108–173, § 103(d)(1)(B), which directed the amendment of subsec. (c)(1) by inserting “subject to subsection (e) of this section” after “section 1396b (a)(1) of this title”, was executed by making the insertion after “section 1396b (a) of this title” in subpar. (C) to reflect the probable intent of Congress.
Subsec. (d). Pub. L. 108–173, § 103(c), added subsec. (d).
Subsec. (e). Pub. L. 108–173, § 103(d)(1)(C), added subsec. (e).
Effective Date of 2008 Amendment
Amendment by Pub. L. 110–275effective Jan. 1, 2010, see section 113(c) ofPub. L. 110–275, set out as a note under section 1320b–14 of this title.
Effective Date of 2005 Amendment
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